BIDYUT SARKAR & ANR.versusKANCHILAL PAL (DEAD) THROUGH LRS. & ANR.

          [2024] 8 S.C.R. 984 : 2024 INSC 704

                Bidyut Sarkar & Anr.
                         v.
      Kanchilal Pal (Dead) Through Lrs. & Anr.
          (Civil Appeal Nos. 10509-10510 of 2013)
                         28 August 2024
      [Vikram Nath and Prasanna B. Varale, JJ.]

                    Issue for Consideration
Issue arose as regards admissibility of the insufficiently stamped
agreement to sell.

                           Headnotes†
Stamp Act, 1899 – ss.35, 36, 40 and 42 – Instruments not duly
stamped inadmissible in evidence, etc. – Suit for specific
performance of contract based on agreement to sell, filed by
the respondent no. 1 against the defendant no. 1-owner of
the property – Trial court dismissed the suit on the finding
that the agreement to sell not admissible in evidence being
insufficiently stamped – Appeal thereagainst by the respondent
no. 1 allowed by the High Court – Appellants, in whose favour
the defendant no. 1 had executed the sale deed filed cross
objections against the findings of the trial court recorded
against them, dismissed by the High Court – However, as
regards admissibility of the agreement to sell it was held that
as the respondent no. 1 had accepted that he would pay the
deficient stamp duty and penalty as assessed by the collector,
the trial court erred in dismissing the suit on the ground that
the agreement to sell, could not be enforced being executed
on insufficiently stamped paper – Correctness:
Held: No reason to disagree with the findings of the trial
court regarding the inadmissibility of the agreement to sell –
Document, being insufficiently stamped, was rightfully barred from
being admitted as evidence in the absence of the requisite stamp
duty and penalty being paid and certified by the Collector – As the
document was found to be insufficiently stamped and was marked
as exhibit with objection and that objection having not been removed
or cured, no benefit of s.36 could be extended to the respondent
no.1 – High Court did not consider the statutory provisions and
only proceeded to rely upon the statement of the respondent
[2024] 8 S.C.R.                                                               985

    Bidyut Sarkar & Anr. v. Kanchilal Pal (Dead) Through Lrs. & Anr.


     no.1 that he had accepted to deposit the deficiency in stamp duty
     and penalty, if any, imposed by the Collector – Even till date, the
     respondent no.1 has not made any efforts before the Collector
     to get the deficiency and penalty determined on the impounded
     document and to clear the same – As a result, the document
     remains inadmissible in evidence under the express bar imposed
     by s.35 – Failure to resolve the deficiency in stamp duty prevents
     the document from being considered as admissible and valid in
     evidence – Thus, until the necessary stamp duty and penalty are
     duly paid and endorsed by the Collector, the instrument remains
     legally barred from being admitted in evidence – High Court failed
     to recognize that an insufficiently stamped document can only be
     admitted into evidence after the deficiency in stamp duty and any
     applicable penalty has been duly paid and cleared – This lapse
     of procedure not properly addressed by the High Court – As the
     document is foundational to the suit, the failure to comply with the
     statutory requirements renders the entire claim unenforceable –
     Respondent no. 1 cannot claim relief on the basis of a document
     that has not satisfied the legal requirements for admissibility –
     Thus, the impugned order of the High Court set aside and that of
     the trial court dismissing the suit restored. [Paras 21-27, 30, 32, 33]

                               Case Law Cited
     Ram Rattan (dead) by L.Rs. v. Bajrang Lal and Others, AIR 1978
     SC 1393; Javer Chand and others v. Pukhraj Surana, AIR 1961
     SC 1655 – referred to.

                                 List of Acts
     Stamp Act, 1899.

                              List of Keywords
     Instruments not duly stamped; Admissible in evidence; Suit for
     specific performance of contract; Agreement to sell; Insufficiently
     stamped; Cross objections; Deficient stamp duty and penalty.

                             Case Arising From
     CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 10509-10510
     of 2013
     From the Judgment and Order dated 05.12.2008 of the High Court of
     Calcutta in FA No. 282 of 2006 and COT No. 2304 of 2005
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                          Appearances for Parties
       Subrata Dutt, Ms. Shipra Ghose, Advs. for the Appellants.
       Shubhayu Roy, Rohit Dutta, Ms. Shalini Kaul, Ms. Priyata Chakraborty,
       Advs. for the Respondents.

                 Judgment / Order of the Supreme Court
                                      Order
1.     These appeals, by defendant nos.2 and 3, have been filed assailing
       the correctness of the judgment and order dated 05.12.2008
       whereby the Division Bench of Calcutta High Court allowed the
       First Appeal No.282 of 2006, titled Kanchilal Pal vs. Sashti Charan
       Banerjee & Others, and after setting aside the judgment of the Trial
       Court dismissing the suit of the respondent no.1, proceeded to
       decree the suit for specific performance of the contract in favour of
       plaintiff-respondent no.1. Hereinafter will deal with the parties as
       they have been referred in the Trial Court.
2.     Relevant facts giving rise to the present appeals are as follows:
       2.1. Sashti Charan Banerjee-respondent no.2, was admittedly the
            owner of the property in dispute. According to the appellants,
            respondent no.1 filed a suit for specific performance registered
            as Title Suit No.123 of 1999, Kanchilal Pal vs. Sashti Charan
            Banerjee and two others in the Court of Civil Judge (Senior
            Division), Barasat, for a decree of specific performance of
            contract dated 29.03.1999. The plaint allegations are as follows:
            a)   Defendant no.1 is the owner of property in question being
                 Premises No.126, Rajkumar Mukherjee Road, Calcutta,
                 700035, within the JL No.5, Paragana Calcutta, Khatian
                 No.2292 bearing Plot Nos. 2477 and 2478 measuring
                 about 7 cottahs, 7 1/2 Chittack of land, including the
                 structures thereon.
            b)   Defendant no.1 intended to sell the premises in question
                 for which the plaintiff agreed to purchase the same for a
                 consideration of Rs.3,00,000/- (Rupees three lakhs only).
                 The plaintiff was required to develop the property/premises
                 in question while dividing into plots and to sell the same
                 to different persons within the period of one year and,
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    Bidyut Sarkar & Anr. v. Kanchilal Pal (Dead) Through Lrs. & Anr.


                after realizing sale consideration from the proposed
                purchasers, shall pay the balance amount of Rs.2,90,000/-
                (Rupees two lakhs ninety thousand only) whereupon
                defendant no.1 would transfer the land in favour of the
                plaintiff or his nominees, as the case would be.
           c)   An advance amount of Rs.10,000/- (Rupees ten thousand
                only) is said to have been paid in cash to defendant no.1.
                The plaintiff was also empowered to make a settlement
                for ejectment of the tenants residing in the premises in
                question and take possession from them. The plaintiff
                was also authorized to carry out development work and
                to make construction of common passage, drain, etc. in
                the meantime and to collect money from the proposed
                buyers of the plots to be developed.
     2.2. In due course, a sale deed would be executed by defendant
          no.1 in favour of the nominees or the plaintiff and in such sales,
          the plaintiff would be a confirming party. The said exercise was
          to be completed within one year. In case defendant no.1 fails
          to execute the sale deed, the plaintiff or his nominees would
          be at liberty to file a suit for specific performance.
     2.3. It was further provided in the agreement that, in case the plaintiff
          fails to pay the amount as agreed within the time stipulated i.e.
          one year, the agreement to sell would be treated as cancelled.
     2.4. Further, according to the plaint, the plaintiff has spent an amount
          of Rs.2,00,000/- (Rupees two lakhs only) for construction of
          common passage, drain, etc. and has also contacted with the
          tenants to purchase part of the property in question measuring
          three cottahs and that they would pay an amount of Rs.1,20,000/-
          (Rupees one lakh twenty thousand only), out of which the plaintiff
          had received Rs.50,000/- (Rupees fifty thousand only) from one
          of the tenants. The plaintiff also claimed to be in possession.
          He also requested defendant no.1 to deliver the original title
          deeds, which defendant no.1 did not oblige.
     2.5. The tenants, on 20.05.1999, came to the plaintiff and showed
          him letter of an advocate and, after going through the same, the
          plaintiff learnt that defendant no.1 had already transferred the
          property in question vide sale deed dated 03.05.1999 in favour
          of defendant nos.2 and 3 (appellants). The plaintiff thereafter
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            made inquiries and again approached defendant nos.1 to 3 to
            execute the sale deed in his favour but as they declined, he
            was compelled to institute the suit on 21.05.1999.
       2.6. It is also averred in the plaint in paragraph 10 that the plaintiff
            was always ready and willing to perform his part of the contract.
3.     Defendant no.1 filed his written statement denying the plaint
       allegations. A separate written statement was filed by defendant
       nos.2 and 3. Defendant no.1 in his written statement stated that he
       had entered into an agreement to sell dated 10.03.1999 in favour
       of defendant nos.2 and 3 and had also executed a registered
       deed of conveyance on 03.05.1999 in favour of defendant nos.2
       and 3 for valuable consideration received by him and, also handed
       over possession to them. Thereafter, a letter of atonement dated
       18.05.1999 was served on the tenant of the premises in question
       on behalf of all the three defendants through their advocates which
       was duly received by them informing them about the transfer of title
       from defendant no.1 to defendant nos.2 and 3.
4.     It is further stated in the written statement of defendant no.1 that
       plaintiff approached him on 24.03.1999 with a proposal to purchase
       the said property, however, defendant no.1 declined the said proposal
       informing him that he had already entered into an agreement to
       sell with defendant nos.2 and 3. The plaintiff, however, continued
       with his insistence to purchase the property and in that respect
       on 29.03.1999 at about 04:30 PM, the plaintiff compelled defendant
       no.1 to accompany him to the machine shop of Ajit Bhattacharjee,
       where under threat and pressure and surrounded by about ten
       persons, he was compelled to sign some papers against his will. He
       was not even allowed to read the papers, and he was threatened not
       to disclose such incident to any person, including police. Despite the
       same, defendant no.1 reported the matter to the police on the basis
       of which G.D. Entry no.713 was made at the Talatola Police Station
       on 07.04.1999. The plaintiff, along with his men and agents, tried
       to cut the trees over the property in question on 03.04.1999, which
       being illegal and unlawful, was again reported to the police station at
       Baranagar and registered vide G.D. Entry no.496 dated 04.09.1999.
5.     Defendant no.1 also moved an application under section 144(2)
       Code of Criminal Procedure, 1973, before the Executive Magistrate
       at Barrackpore, which was registered as M.P. Case No.894 of 1999.
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     Bidyut Sarkar & Anr. v. Kanchilal Pal (Dead) Through Lrs. & Anr.


      The defendant also informed the Chairperson, Baranagar Municipality,
      through advocates’ letter dated 12.04.1999, against the illegal acts
      of the plaintiff over the suit property.
6.    Further, defendant no.1 also lodged a criminal case no. C/1335
      of 1999 before the Chief Metropolitan Magistrate under sections
      384/341/34 Indian Penal Code, 1860 which was still pending at the
      time of filing of the written statement. It was further stated in the
      written statement of defendant no.1 that on 23.04.1999, the plaintiff
      came to his house and threw some xerox copies of papers with a
      bundle of currency notes of Rs.10,000/- (Rupees ten thousand only)
      and threatened him with dire consequences if he discloses anything
      to the police. It was only then that defendant no.1 came to know
      of the alleged agreement to sell dated 29.03.1999, which he was
      compelled to sign under circumstances already stated above.
7.    It is also averred in the written statement that defendant no.1 tried
      to return the amount of Rs.10,000/- (Rupees ten thousand only) to
      the plaintiff by way of cheque which he received but later returned.
      Despite best efforts, defendant no.1 could not return the amount of
      Rs.10,000/- (Rupees ten thousand only) to the plaintiff.
8.    It was further averred that plaintiff was land speculator and promoter.
      He wanted to grab the suit property by hook or crook. The plaintiff
      joined hands with the tenants and tried to create obstructions from
      inspecting the premises in question by defendant nos. 2 and 3.
      Defendant nos.2 and 3 also lodged a complaint in that regard, being
      G.D. entry no.1434 dated 03.04.1999 at the Baranagar Police Station.
9.    In para-wise reply, defendant no.1 denied the plaint allegations,
      however, accepted the execution of sale deed dated 03.05.1999
      in favour of defendant nos.2 and 3. On such averments defendant
      no.1 sought that suit deserves to be dismissed.
10. Defendant nos. 2 and 3 in their written statement also denied the plaint
    allegations and more or less reiterated the same facts as pleaded
    in the written statement of defendant no.1. In addition, it was stated
    that defendant nos. 2 and 3 filed Title suit No.235 of 1999 in the
    Court of Civil Judge (Junior Division), Sealdah, against the plaintiff
    of which the plaintiff had full knowledge.
11. Based upon the pleadings of the parties, the Trial Court framed the
    following issues:
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                                    “ISSUES
          1)   Is the suit maintainable in its present form and law?
          2)   Has the plaintiff any cause of action to file this suit?
          3)   Is the suit barred by limitation?
          4)   Was there any concluded contract in between the
               plaintiff and the defendant no.1 on 29.03.1999
               regarding sale of the ‘A’ schedule property by
               defendant no.1 in favour of the plaintiff?
          5)   Was the defendant no.1 compelled to put signature
               under threat and compulsion by the plaintiff and his
               associates at Dharamtala Street, Kolkata?
          6)   Are the defendant nos. 2 & 3 bonafide purchasers
               for value of the suit premises without notice?
          7)   Is the agreement of sale dated 29.03.1999 which
               has marked as Exbt.1 with objection be admitted in
               evidence?
          8)   Is the plaintiff entitled to get the benefit of section 36
               of the Indian Stamp Act?
          9)   Is the plaintiff ready and willing to perform his part
               of the contract inviting Section 16(c) of the specific
               Relief Act?
          10) Was there any part performance of the said contract?
          11) Is the plaintiff entitled to get relief as prayed for?
          12) To what other relief/reliefs, if any, is the plaintiff
              entitled?”
12. The parties led evidence, both documentary and oral. The plaintiff
    examined himself as PW-1 and proved the agreement to sell
    dated 29.03.1999 which was although marked as Exhibit-1 but with
    objections, as defendant no.1 had raised an objection regarding the
    said agreement to sell being not properly stamped. On behalf of the
    defendants, defendant no.1 examined himself as DW-1, whereas
    on behalf of defendant nos.2 and 3, their father entered the witness
    box as DW-2. Various documents on behalf of the defendants were
    proved by the respective witnesses.
[2024] 8 S.C.R.                                                           991

    Bidyut Sarkar & Anr. v. Kanchilal Pal (Dead) Through Lrs. & Anr.


13. The Trial Court decided all the issues relating to maintainability
    of the suit, cause of action, limitation, validity of agreement to sell
    dated 29.03.1999, defendant nos.2 and 3 being bona fide purchasers
    or not, readiness and willingness of the plaintiff to perform his part
    of the contract, in favour of the plaintiff and against the defendants.
    However, the Trial Court dealt in detail with regard to the admissibility
    of the agreement to sell dated 29.03.1999 and whether the plaintiff
    was entitled to get the benefit of section 36 of Indian Stamp Act, 18991.
    The Trial Court dismissed the suit of the plaintiff on the finding that the
    agreement to sell dated 29.03.1999 was not admissible in evidence
    as the defendants had raised objections regarding the same. Once
    the same was held not admissible, the suit for enforcement of the
    same was held liable to be dismissed.
14. Aggrieved by the same, the plaintiff filed an appeal under section 96
    of the Code of Civil Procedure, registered as Appeal from Original
    Decree No.282 of 2006. Further, defendant nos.2 and 3 filed cross-
    objections against the findings of the Trial Court recorded against
    them, which was registered as COT No.2304 of 2005. The Division
    Bench of the Calcutta High Court allowed the First Appeal and
    dismissed the cross-objections. The Division Bench affirmed the
    findings recorded by the Trial Court on all issues already decided in
    favour of the plaintiff and accordingly dismissed the cross-objections.
    However, with regard to issue of admissibility of the agreement to
    sell dated 29.03.1999, the Division Bench was of the view that as
    the plaintiff had accepted that he would pay the deficient stamp duty
    and penalty as may be assessed by the competent authority/collector,
    the Trial Court had erred in dismissing the suit on the ground that
    Ex.-1-the agreement to sell, could not be enforced being executed
    on insufficiently stamped paper.
15. Aggrieved, the present appeals have been preferred by defendant
    nos.2 and 3 against the judgment of the High Court in allowing the
    first appeal of the plaintiff and further on dismissing their cross-
    objections.
16. Learned counsel for the appellants has not only challenged the
    findings of the High Court on the admissibility of the agreement to
    sell dated 29.03.1999 but also the concurrent findings of both the


1   The Stamp Act
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       courts on other issues regarding the validity of agreement to sell,
       circumstances under which it was executed and defendants 2 and 3
       not being bona fide purchasers for value.
17. Upon considering the submissions, we are of the view that the findings
    of the High Court regarding the admissibility of the agreement to sell
    dated 29.03.1999 were neither based on a detailed consideration
    of the relevant statutory provisions nor supported by established
    legal principles. It appears that the High Court, without thoroughly
    examining the applicable legal provisions, cursorily concluded that
    the document would be admissible simply because the plaintiff had
    expressed willingness to pay the deficient stamp duty and any penalty
    imposed by the competent authority or the Collector. However, it is
    evident that the plaintiff made no concrete effort to initiate or pursue
    the necessary proceedings before the competent authority or the
    Collector to determine the deficient stamp duty and penalty. The High
    Court, therefore, failed to recognize that an insufficiently stamped
    document can only be admitted into evidence after the deficiency
    in stamp duty and any applicable penalty has been duly paid and
    cleared. This lapse of procedure was not properly addressed in the
    High Court’s judgment.
18. At the time of deposition of the plaintiff on 07.03.2003, he stated in
    his examination-in-chief while referring to the agreement to sell dated
    29.03.1999, that this was the original agreement to sell executed
    by defendant no.1 Sashti Charan Banerjee in his favour in respect
    of the suit property and it had the signature of defendant no.1 on
    all pages which he had signed in his presence. The agreement to
    sell was drafted by Prasanta Pal and typed by Neel Kamal Mallick
    in his presence. He paid Rs.10,000/- (Rupees ten thousand only)
    to defendant no.1 as per the said agreement and it was marked as
    Ex.-1 with objection. He further stated that he was ready to deposit
    the deficient stamp duty as per order of the Collector. The Trial
    Court marked the document as Ex.-1 with objection which is also
    reflected in the Exhibit list similarly. Simultaneously, the Trial Court
    in the order sheet dated 07.03.2003 noted the said document as
    Ex.-1 with objection and had further issued notice to the Collector
    to assess the deficient stamp duty and penalty as per the provisions
    of section 40 of the Stamp Act and to submit the report accordingly.
    Further, a copy of the order dated 07.03.2003, along with xerox copy
    of the disputed agreement to sell dated 29.03.1999, was sent to the
[2024] 8 S.C.R.                                                        993

    Bidyut Sarkar & Anr. v. Kanchilal Pal (Dead) Through Lrs. & Anr.


     Collector vide letter no.63 dated 28.03.2003. However, no reply was
     received from the Collector till the date the judgment was delivered
     by the Trial Court.
19. The Trial Court thereafter proceeded to consider the statutory
    provisions of the Stamp Act namely sections 35, 36, 40 and 42. After
    discussing the same in detail, it proceeded to hold that the document
    was inadmissible in evidence, as the plaintiff failed to further pursue
    the proceedings before the Collector resulting into non-determination
    of the deficiency and the penalty and consequently, the non-deposit
    of the deficiency and penalty, which could have been determined by
    the Collector. The High Court, unfortunately, has not considered the
    statutory provisions and only proceeded to rely upon the statement
    of the plaintiff that he had accepted to deposit the deficiency in
    stamp duty and penalty, if any, imposed by the Collector. It would
    be worthwhile to mention here that even till date, the plaintiff has
    not made any efforts before the Collector to get the deficiency and
    penalty determined on the impounded document and to clear the
    same.
20. The relevant provisions of the Stamp Act, namely, sections 35, 36,
    40 and 42 are reproduced hereunder:
           “35. Instruments not duly stamped inadmissible in
           evidence, etc. —
           No instrument chargeable with duty shall be admitted in
           evidence for any purpose by any person having by law or
           consent of parties authority to receive evidence, or shall
           be acted upon, registered or authenticated by any such
           person or by any public officer, unless such instrument is
           duly stamped:
             Provided that—
             (a) any such instrument [shall] be admitted in
             evidence on payment of the duty with which the
             same is chargeable, or, in the case of any instrument
             insufficiently stamped, of the amount required to make
             up such duty, together with a penalty of five rupees,
             or, when ten times the amount of the proper duty or
             deficient portion thereof exceeds five rupees, of a
             sum equal to ten times such duty or portion;
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         (b) where any person from whom a stamped receipt
         could have been demanded, has given an unstamped
         receipt and such receipt, if stamped, would be
         admissible in evidence against him, then such receipt
         shall be admitted in evidence against him on payment
         of a penalty of one rupee by the person tendering it;
         (c) Where a contract or agreement of any kind is
         effected by correspondence consisting of two or more
         letters and any one of the letters bears the proper
         stamp, the contract or agreement shall be deemed
         to be duly stamped;
         (d) nothing herein contained shall prevent the
         admission of any instrument in evidence in any
         proceeding in a Criminal Court, other than a
         proceeding under Chapter XII or Chapter XXXVI of
         the Code of Criminal Procedure 1898 (5 of 1898);
         (e) nothing herein contained shall prevent the
         admission of any instrument in any Court when such
         instrument has been executed by or on behalf of [(the)
         (Government)], or where it bears the certificate of
         the Collector as provided by section 32 or any other
         provision of this Act.
       36. Admission of instrument where not to be
       questioned. —
       Where an instrument has been admitted in evidence, such
       admission shall not, except as provided in section 61,
       be called in question at any stage of the same suit or
       proceeding on the ground that the instrument has not
       duly stamped.
                  xxx             xxx             xxx
       40. Collectors power to stamp instruments
       impounded. —
       (1) When the Collector impounds any instrument under
       section 33, or receives any instrument sent to him under
       section 38, sub-section (2), not being an instrument
       chargeable [with a duty not exceeding ten naye paise]
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    Bidyut Sarkar & Anr. v. Kanchilal Pal (Dead) Through Lrs. & Anr.


           only or a bill of exchange or promissory note, he shall
           adopt the following procedure: —
             (a) if he is of opinion that such instrument is duly
             stamped or is not chargeable with duty, he shall certify
             by endorsement thereon that it is duly stamped, or
             that it is not so chargeable, as the case may be;
             (b) if he is of opinion that such instrument is
             chargeable with duty and is not duly stamped, he
             shall require the payment of the proper duty or the
             amount required to make up the same, together with
             a penalty of five rupees; or, if he thinks fit, [an amount
             not exceeding] ten times the amount of the proper
             duty or of the deficient portion thereof, whether such
             amount exceeds or falls short of five rupees:
           Provided that, when such instrument has been impounded
           only because it has been written in contravention of
           section 13 or section 14, the Collector may, if he thinks fit,
           remit the whole penalty prescribed by this section.
           (2) Every certificate under clause (a) of sub-section (1)
           shall, for the purposes of this Act, be conclusive evidence
           of the matters stated therein.
           (3) Where an instrument has been sent to the Collector
           under section 38, sub-section (2), the Collector shall, when
           he has dealt with it as provided by this section, return it
           to the impounding officer.
                       xxx              xxx              xxx
           42. Endorsement of instruments in which duty has
           been paid under sections 35, 40 or 41—
           (1) When the duty and penalty (if any) leviable in respect of
           any instrument have been paid under section 35, section 40
           or section 41, the person admitting such instrument in
           evidence or the Collector, as the case may be, shall
           certify by endorsement thereon that the proper duty or,
           as the case may be, the proper duty and penalty (stating
           the amount of each) have been levied in respect thereof,
           and the name and residence of the person paying them.
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          (2) Every instrument so endorsed shall thereupon be
          admissible in evidence, and may be registered and acted
          upon and authenticated as if it had been duly stamped,
          and shall be delivered on his application in this behalf to
          the person from whose possession it came into the hands
          of the officer impounding it, or as such person may direct:
          Provided that—
             (a) no instrument which has been admitted in evidence
             upon payment of duty and a penalty under section
             35, shall be so delivered before the expiration of
             one month from the date of such impounding, or if
             the Collector has certified that its further detention
             is necessary and has not cancelled such certificate;
             (b) nothing in this section shall affect the Code of Civil
             Procedure,1882 (14 of 1882), section 144 clause 3.”
21. According to the language of the section 35 of the Stamp Act,
    instruments not duly stamped would be inadmissible in evidence, and
    any instrument chargeable with duty would be admissible in evidence
    only and only if such instrument is duly stamped. The proviso gives
    illustration as to how the instrument would become admissible upon
    payment of duty with which it was chargeable or in case of instruments
    insufficiently stamped, the payment is made to make up such duty
    along with penalty mentioned therein. It also refers to exceptions
    where a document could be admissible in evidence under a given
    situation. As elaborated in clauses (b), (c), (d) and (e) of the proviso,
    the instrument in question i.e. agreement to sell dated 23.03.1999
    does not fall under any exception.
22. Section 36 of the Stamp Act provides for admissibility of an instrument
    not being questioned if the same had been admitted in evidence
    on the ground that it is not duly stamped except as provided under
    section 61 of the Stamp Act. In the present case, the instrument in
    question was admitted subject to objection as noted in the deposition
    of the plaintiff (PW-1) and recorded in the order sheet of the Trial
    Court dated 07.03.2003. As such section 36 of the Stamp Act will
    not come to the rescue of the plaintiff.
23. Section 40 of the Stamp Act gives power to the Collector to stamp
    such instruments which have been impounded. The Collector will
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    Bidyut Sarkar & Anr. v. Kanchilal Pal (Dead) Through Lrs. & Anr.


     determine the proper duty payable on such instrument along with
     penalty as provided in clause (b) of section 41.
24. Section 42 of the Stamp Act provides that when duty and penalty,
    if any, leviable in respect of any instrument has been paid under
    sections 35, 40 or 41 upon endorsement by the Collector that such
    duty has been paid, instrument shall thereupon be admissible in
    evidence.
25. In the present case, the agreement to sell dated 29.03.1999 was
    found by the Trial Court to be insufficiently stamped. Consequently,
    the matter was referred to the Collector for determination of proper
    stamp duty and any applicable penalty. As per the provisions of
    Section 42 of the Stamp Act, such a document can only become
    admissible in evidence after deficiency in stamp duty and the
    penalty, if any, have been assessed by the Collector, and the
    requisite amounts have been paid. Once the deficiency and penalty
    are cleared, the Collector is required to certify the document by
    endorsement, indicating that the required duty and penalty have been
    paid. Only upon such certification can the document be admitted
    into evidence and acted upon legally.
26. Despite the Trial Court’s referral of the matter to the Collector, no
    determination regarding the deficiency in stamp duty or penalty
    was made by the Collector under Section 40 of the Samp Act. As
    a result, the document remains inadmissible in evidence under the
    express bar imposed by Section 35 of the Stamp Act. Failure to
    resolve the deficiency in stamp duty prevents the document from
    being considered as admissible and valid in evidence. Therefore, until
    the necessary stamp duty and penalty are duly paid and endorsed
    by the Collector, the instrument remains legally barred from being
    admitted in evidence.
27. The argument advanced on behalf of the plaintiff-respondent no.1 is
    that he would be entitled to get benefit of section 36 of the Stamp
    Act as the document had been exhibited and admitted in evidence,
    holds no ground in as much as the document was found to be
    insufficiently stamped and was marked as exhibit with objection
    and that objection having not been removed or cured, no benefit
    of section 36 of the Stamp Act could be extended to the plaintiff-
    respondent no.1.
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                       Digital Supreme Court Reports


28. In this connection, following cases are cited:
       Ram Rattan (dead) by L.Rs. vs. Bajrang Lal and others;2
       Javer Chand and others vs. Pukhraj Surana;3
29. The Trial Court had placed reliance upon the aforesaid two judgments
    and had also extracted the relevant part from the said judgments. The
    facts in the 1978 case of Ram Rattan (dead) by L.Rs.(supra) were
    quite similar wherein an instrument had been exhibited with objection
    but therein also the said objection had not been removed or cured.
    This Court held that such an instrument would not be admissible in
    evidence and section 36 of the Stamp Act would not be attracted.
    The relevant paras of this judgement are reproduced below:
            “6. When the document was tendered in evidence by the
            plaintiff while in witness box, objection having been raised
            by the defendants that the document was inadmissible
            in evidence as it was not duly stamped and for want of
            registration, it was obligatory upon the learned trial Judge
            to apply his mind to the objection raised and to decide the
            objects in accordance with law. Tendency sometimes is to
            postpone the decision to avoid interruption in the process
            of recording evidence and, therefore, a very convenient
            device is resorted to, of marking the document in evidence
            subject to objection. This, however would not mean that
            the objection as to admissibility on the ground that the
            instrument is not duly stamped is judicially decided; it
            is merely postponed. In such a situation at a later stage
            before the suit is finally disposed of it would none-the-less
            be obligatory upon the court to decide the objection. If
            after applying mind to the rival contentions the trial court
            admits a document in evidence, Section 36 of the Stamp
            Act would come into play and such admission cannot
            be called in question at any stage of the same suit or
            proceeding on the ground that the instrument has not
            been duly stamped. The court, and of necessity it would
            be trial court before which the objection is taken about



2   AIR 1978 SC 1393
3   AIR 1961 SC 1655
[2024] 8 S.C.R.                                                           999

    Bidyut Sarkar & Anr. v. Kanchilal Pal (Dead) Through Lrs. & Anr.


           admissibility of document on the ground that it is not duly
           stamped, has to judicially determine the matter as soon
           as the document is tendered in evidence and before it is
           marked as an exhibit in the case and where a document
           has been inadvertently admitted without the court applying
           its mind as to the question of admissibility, the instrument
           could not be said to have been admitted in evidence with a
           view to attracting Section 36 (see Javer Chand v. Pukhraj
           Surana) [AIR 1961 SC 1655] . The endorsement made
           by the learned trial Judge that “Objected, allowed
           subject to objection”, clearly indicates that when the
           objection was raised it was not judicially determined
           and the document was merely tentatively marked and
           in such a situation Section 36 would not be attracted.
           7. Mr Desai then contended that where an instrument
           not duly stamped or insufficiently stamped is tendered
           in evidence, the court has to impound it as obligated by
           Section 33 and then proceed as required by Section 35
           viz. to recover the deficit stamp duty along with penalty.
           Undoubtedly, if a person having by law authority
           to receive evidence and the civil court is one such
           person before whom any instrument chargeable with
           duty is produced and it is found that such instrument
           is not duly stamped, the same has to be impounded.
           The duty and penalty has to be recovered according
           to law. Section 35, however, prohibits its admission
           in evidence till such duty and penalty is paid. The
           plaintiff has neither paid the duty nor penalty till
           today. Therefore, stricto sensu the instrument is not
           admissible in evidence. Mr Desai, however, wanted
           us to refer the instrument to the authority competent
           to adjudicate the requisite stamp duty payable on the
           instrument and then recover the duty and penalty which
           the party who tendered the instrument in evidence is in
           any event bound to pay and, therefore, on this account it
           was said that the document should not be excluded from
           evidence. The duty and the penalty has to be paid when
           the document is tendered in evidence and an objection is
           raised. The difficulty in this case arises from the fact that
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          the learned trial Judge declined to decide the objection
          on merits and then sought refuge under Section 36. The
          plaintiff was, therefore, unable to pay the deficit duty and
          penalty which when paid subject to all just exceptions,
          the document has to be admitted in evidence. In this
          background while holding that the document Ext. I would
          be inadmissible in evidence as it is not duly stamped, we
          would not decline to take it into consideration because
          the trial court is bound to impound the document and deal
          with it according to law.”
                                                   [emphasis added]
30. We find no reason to disagree with the findings of the Trial Court
    regarding the inadmissibility of the agreement to sell dated 29.03.1999.
    The document, being insufficiently stamped, was rightfully barred from
    being admitted as evidence in the absence of the requisite stamp
    duty and penalty being paid and certified by the Collector. The High
    Court, in treating this document as admissible without resolving the
    stamp duty deficiency, overlooked the statutory mandate under the
    Stamp Act. As the document is foundational to the suit, the failure
    to comply with the statutory requirements renders the entire claim
    unenforceable. Consequently, the suit must be dismissed, as it is
    based on an instrument that is legally inadmissible as evidence. The
    plaintiff cannot claim relief on the basis of a document that has not
    satisfied the legal requirements for admissibility.
31. We need not deal with other arguments on merits regarding the
    validity of the instrument dated 29.03.1999 and deal with the issue
    of coercion as alleged by defendant no.1.
32. Accordingly, the appeals are liable to be allowed. The amount of
    Rs.10,000/- (Rupees ten thousand only) admittedly received by
    defendant no.1 although under abnormal conditions as alleged by
    defendant no.1 in the interest of the parties would be liable to be
    returned to the plaintiff. The said amount has remained with defendant
    no.1 for almost 25 years right from 1999 till the present. Now that
    the appellants have purchased the property from defendant no.1,
    we fasten the liability on the appellants to return the amount to the
    plaintiff. We quantify the said amount to be a rounded of figure at
    Rs.5,00,000/- (Rupees five lakhs only) to be paid within a period of
    three months.
[2024] 8 S.C.R.                                                          1001

    Bidyut Sarkar & Anr. v. Kanchilal Pal (Dead) Through Lrs. & Anr.


33. In view of the above the appeals are allowed, the impugned order
    of the High Court is set aside and that of the Trial Court dismissing
    the suit is restored. Additionally, it is directed that the appellants shall
    pay Rs.5,00,000/-(Rupees five lakhs only) to the plaintiff-respondent
    no.1 within three months from today.

     Result of the case: Appeals Allowed.



     †
         Headnotes prepared by: Nidhi Jain